Malaysian Construction Industry Sector Economics Essay

1247 word (5 pages) essay in Economics

5/12/16 Economics Reference this

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Malaysian construction industry sector covers the aspects of the planning, design, conservation, demolition and repairing various types of buildings and all types of mechanical and civil engineering works other field work involved (Ofori, 1990). Economic construction industry is different from other industrial products because it is considered unique and a very important asset. It encompasses large Economics cannot be separated and are very expensive. It is very different in terms of the sale and purchase of buildings and other items. Malaysia is a developing country to rapid economic development. Therefore, the construction industry plays an important role in realizing the aspirations of the people as well as meeting basic needs. This is because the contribution of the national economy almost to 6 percent in the output analysis of the gross National Product (KDNK). The construction industry is an important economy in the management and activities either in the private and government sector.

The construction products provide the necessary public infrastructure and private physical structures for many productive activities such as services, commerce, utilities and other industries. The industry is not only important for its finished product, but it also employs a large number of people (directly and indirectly) and therefore has an effect on the economy of a country/region during the actual construction process. Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real gross National Product (KDNK).


In Malaysia, the construction industry is one of the first sectors of the national economy. During the era of increased economic development in Malaysia’s development, its contribution to gross domestic product (GDP) is in the range of 3-6 percent per year. For eight years from 1989 -1996 year, the construction industry has recorded double-digit growth rates. The development of the construction industry is directly proportional to the national economy. This is due to the construction of the project or activity involves high costs. Must require the good economic conditions and stable to be able to have the capital or cash flow sufficient to launch all these construction projects. This can be demonstrated by looking at the growth of the construction industry and a good stable country in tahun1990 has achieved the highest growth of 19.1 per cent, while growth during recessions in 1998 also was 23.0 percent.

Construction industry to achieve the best performance in 1995 with the transfer of the property growth of new and existing buildings by 15.8 percent and 34.1 percent. For the housing component, transfer growth (new and existing) is to reach 11.7 percent, which exceeded 150,000 units with total more than RM15.8 Billion. Help for buyers are also available. Loans offered by the banking system by as much as 18.1% or RM5.1 billion to RM33.1 billion as at end-1995.

From a study of the National Bank, offering individual loans approved by banks increased by 38.1%. From this value of 51.9% for medium-cost houses, 36.1% and 12% higher cost to lower cost. For non-residential components, the number of loans approved by banks amounted to RM40.2 billion. Total transfer of commercial buildings grew by 10.1% to RM6.9 billion.

In the 1998 recession, the construction industry where the growth of -23% compared to 9.5% recorded in 1997. Reduction in the value of the transfer of 28% – 34.8% was recorded. Comparing the performance of the construction industry in 1995 and 1998 has shown a close link between the performances of the construction industry to the national economy. The research cycle analysis and product demand is needed to enable us to know in greater detail about the nature of the industry and enable a more effective investment.

The construction industry has attracted researchers, but most studies have been done on the construction industry is revolves around the study of technology as design analysis. The lack of studies that touch on product demand and the development of the construction industry. This is probably one of the causes surplus in output growth falling building and construction industry is worse than the national economy when the economic downturn. Analysis of product demand and the relationship between economic growth and the construction industry have seen. This will not only demonstrate the workability of a building on the demand side but also allows estimates are made about the development of the construction industry based on current economic conditions and economic cycles related to the construction industry for the past. Research examines the development of the Construction Industry and correlation with output components such as commercial, residential and civil engineering to be carried out.

As the construction industry involving investments or high cost and different components, is often associated with the request output. Analysis of demand for each type of product development is very important to know the extent of the economic influence on the development of the construction industry in Malaysia. Analysis of the trends in the construction industry and its relationship with the demand for its products to be made. This will give a clear picture of the development of the construction industry in the past, but also to estimate its future. Close relationship between the construction industry and economic growth of a country is often referred to. Instability of the construction industry in Malaysia led people to worry about making an investment. A detailed analysis is made to study the development of the construction industry in Malaysia to systematic planning and preparation in advance can be done to overcome the problem of the construction industry during the recession. As the construction industry as a major economic sector in Malaysia, a detailed study should be made so that its development trends can be identified. This study is expected to be a reference in planning and investment sectors of the construction industry in the future by taking into account changes in the size or demand that may occur. Studies should focus on a detailed analysis of the pattern of industrial development

Malaysian construction and building industry relationships in our economy. The construction industry also stimulate the economy. The rapid development of the construction industry will stimulate transport, sale and purchase of plant, building materials and others. It also offers a lot of job opportunities and this led to the improvement of purchases indirectly contribute to the national economy. This shows the relationship of the economy and the construction industry is a two-way street. Because of this relationship, the World Bank (1984) has acknowledged the construction activity is economic stimulus. Study in the Construction Industry more focused on the micro aspects of the industry.

This includes the study of materials, project management and so on. More clearly or more studies focused on materials research, technology and management aspects. Because the construction industry is supported by a number of important components, the components of the study. This component is also necessary to analyze the extent to which these components play a role in the construction of economic cycles or more accurately the influence of the components in the construction of the economic cycle. What is the role of housing and how does it affect the industry requires an analysis of the housing in Malaysia and its contribution to the construction industry. What contributed to the construction industry? Housing is a major sub-sector of the construction industry. This is because the sector accounts for about 35-40% of the gross domestic product each year of construction. Hence the development of the sector

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